Shares of Canoo (NASDAQ:GOEV) stock opened higher by over 10% after the company reported its third-quarter earnings and surpassed $2 billion in orders, $750 million of which are binding orders. Canoo also announced that it had signed an agreement to acquire a 120+ acre manufacturing facility in Oklahoma City. The facility will produce the Lifestyle Delivery Vehicle (LDV) and Lifestyle Vehicle (LV), with the first electric vehicles (EVs) expected to come to market by next year. Production of the LDV is slated to begin on Nov. 17, while final certification is expected to be completed by Q1 of 2023. Canoo has a goal of building at least 15 production vehicles this year, which will go toward customers like Walmart (NYSE:WMT) and NASA.
During the quarter, the EV company reported a net loss of $117.7, bringing the total yearly net loss to $407.5 million. That’s up greatly from the year-over-year (YOY) net loss of $80.9 million, although it should not come as a huge surprise due to Canoo’s emphasis on beginning production. The company has also purchased a manufacturing facility in Pryor, Oklahoma, that will be used to build EV battery modules. By the end of 2024, CEO Tony Aquila believes that it will be able to manufacture 40,000 units per year.
GOEV Stock Accelerates on Earnings and Production Plans
As of Sept. 30, Canoo had access to $200 million of capital through an authorized at-the-market offering (ATM) program. It also had cash and cash equivalents of $6.8 million. With such a large ATM authorization and small cash balance, investors should expect an offering in the near term.
In the long term, the Oklahoma City facility will focus on defense and specialty products. Earlier this year, the U.S. Army requested vehicles from Canoo for analyzation purposes. Before that, NASA asked the company to provide it with vehicles for future lunar exploration launches.
Meanwhile, Aquila sees the company’s U.S.-made products as a beneficiary of the Inflation Reduction Act (IRA). “Our Made in America focus has positioned us favorably with the recently announced IRA bill, and we are proud to be one of the only companies, that can take advantage of these incentives immediately,” he said.
For Q4, Canoo expects operating losses to be between $70 and $90 million. It expects capital expenditures of between $30 and $50 million. While still burning through boatloads of cash, GOEV could be a suitable investment if management is able to execute.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.